JMP Castings Ltd.

JMP Castings Ltd. (JMPCASTINGS) - Auditors Report

Company auditors report

JMP CASTINGS LIMITED
ANNUAL REPORT 2005-2006
AUDITORS' REPORT
TO
THE MEMBERS OF
JMP Castings limited.
1. We have audited the attached Balance Sheet of JMP Castings Limited as at
31st March, 2006 and the related Profit and Loss Account and the Cash Flow
Statement for the year ending on that date, which we have signed under
reference to this report. These financial statements are the responsibility
of the Company's management. Our responsibility is to express our opinion
on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation, we believe that our audit
provides a reasonable basis for our opinion.
3. As required by the Companies (Auditors' Report) Order, 2003 issued by
the Central Government of India in terms of section 227(4A) of the
Companies Act, 1956 of India (The 'Act') and on the basis of such checks of
the books and records of the company as we considered appropriate and
according to the information and explanation given to us, we further report
that:
i) a) The company is maintaining proper records showing full particulars
including quantitative details and situation of fixed assets.
b. The fixed assets are physically verified by the management according to
a phased program designed to cover all the items except furniture &
fixtures, which in our opinion, is reasonable having regard to the size of
the company and the nature of its assets. Pursuant to the program the fixed
assets have been physically verified by the management during the year and
no material discrepancy between the book records and the physical inventory
have been noticed.
c. In our opinion and according to the information and explanation given to
us, as per explanation given, No substantial fixed assets have been
disposed off during the year, as such no effect on going concern status of
the Company.
ii) a) The inventory has been physically verified by the management during
the year/at the year end. In our opinion, the frequency of verification is
reasonable.
b. In our opinion, the procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to the
size of the company and the nature of its business.
c. On the basis of the examination of the inventory records, in our
opinion, the company is maintaining only significant records of inventory,
as required and envisaged as per excise rules. The discrepancies noticed on
physical verification of inventory as compared to the book records, thus
maintained, were not material, as explained.
iii) a. The company has not taken and granted any loans, secured or
unsecured to/from companies, firms or other parties covered in the register
maintained u/s. 301 of the Act. The company has outstanding balance as
advances to be considered as unsecured loans with a company, amount advance
received from company, covered in the register, maintained u/s. 301 of the
Act. The disclosure of parties and amount evolved is as per note No. 18.
b. In our opinion, and terms and conditions, with no interest stipulation
of such loans are not prima facie, prejudicial to the interests of the
company.
c. There is no stipulation for payment of the principal amount and interest
for such advances. As such, there is no overdue amount more than Rupees One
Lakh.
d. In our opinion and according to the information and explanation given to
us, there are adequate internal control procedures commensurate with the
size of the company and the nature of its business for the purchase of
inventory, fixed assets and for the sale of goods. Further, on basis of our
examination to the explanation of the books and records of the company and
according to the information and explanations given to us, we have neither
come across nor been informed of any continuing failure to correct major
weaknesses in the aforesaid internal control procedures.
iv) In our opinion and according to the information and explanation given
to us, there are adequate internal control procedures commensurate with the
size of the company and the nature of its business for the purchase of
inventory, fixed assets and for the sale of goods. Further, on basis of our
examination to the explanation of the books and records of the company and
according to the information and explanations given to us, we have neither
come across nor been informed of any continuing failure to correct major
weaknesses in the aforesaid internal control procedures.
v) a) In our opinion and according to the information and explanation given
to us, the transactions that need to be entered into register maintained
tinder section 301 of the Act, have been so entered.
b) In our opinion, and according to the information and explanation given
to us, the transactions made in pursuance of contract or arrangement
entered into the register in pursuance of section 301 of the Act, and
exceeding the value of Rupees five lakh in respect of any party during the
year have been made as approved as per requirement of Company Law Board.
vi) The company has not accepted any deposits from the public within the
meaning of Section 58A and 58AA of the Act and the rules framed there
under.
vii) In our opinion, the Company has an internal audit system commensurate
with its size and nature of its business.
viii) We have broadly reviewed the books of account maintained by the
company in respect of products where, pursuant to the Rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-section 209 of the Act and are of the
opinion that prima facie, the prescribed accounts and records have been
made and maintained. We have not, however, made a detailed examination of
the records with a view to determine whether they are accurate or complete
subject to this,
ix) a) According to the information and explanation given to us and records
of the company examined by us, in our opinion, the company is not regular
in depositing undisputed statutory dues in respect of Family Pension & PF,
whereas the company is regular in depositing investor education and
protection fund, employee's state insurance income-tax, sales-tax, wealth
tax, customs duty, excise duty, cess and other material statutory dues as
applicable, with the appropriate authorities. The amount of outstanding
dues of FP & PF as on end of year were Rs.2.83 Lacs.
b. According to the information and explanation given to us and the records
of the company examined by us, there were no dues of sales-tax, income-tax,
customs duty, wealth tat, excise duty and cess as at March 31, 2006, which
(rave been ascertained at the end of financial year.
x. The company has accumulated losses as at March 31, 2006 amounting
Rs.88.90 lac and the same are less than 50% of its net worth, The company
has earned the profit during the year thus the company has not incurred
cash losses in the financial year ended on that date as also in the
immediately preceding financial year.
xi. According to the records of the company examined by us and the
information and explanation given to us, the company has not taken any
loans from any bank or debenture holders during the year under audit and
there was no outstanding as at the balance sheet date. The Company has not
taken roan or credit facility from any financial institution.
xii. The Company has not granted loans or advances on the basis of security
by way of pledge of shares, debentures and other securities.
xiii. The provisions of any special statute applicable to chit
fund/nidhi/mutual benefit fund/societies are not applicable to the company.
xiv. In our opinion, the company is not a dealer or trader in shares,
securities, debenture and other investments.
xv. In our opinion and according to the information and explanation given
to us, the company has not given any guarantee, for loans taken by others
from banks or financial institutions.
xvi. The company has not obtained any term loans.
xvii. On the basis of an overall examination of the balance sheet of the
company, in our opinion and according to the information and explanations
given to us, there are no funds raised on a short-term basis, which have
been used for long-term investment, and vice versa.
xix. The company has not made any preferential allotment of share to
parties and companies in the register maintained under section 301 of the
Act during the year.
xx. The company has not created securities in respect of debenture issued
and outstanding at the year-end.
xxi. The company has not raised any money by public issue during the year.
During the course of our examination of the books and records of the
company, carried out in accordance with the generally accepted auditing
practices in India, and according to the information, and explanation given
to us, we have neither come across any instance of fraud on or by the
company, noticed or reported during the year, nor have we been informed of
such case by the management.
4. Further to our comments in paragraph 3 above, we report that:
a. We have obtained all the information and explanation, which to the best
of our knowledge and belief were necessary for the purposes of our audit;
b. In our opinion, proper books of account as required by law have been
kept by the company so far as appears from our examination of those books;
c. The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt
with by this report are in agreement with the books of account;
d. In our opinion, the Balance Sheet, Profit and Loss Account and the Cash
Flow Statement dealt with by this report have been prepared in compliance
with the applicable accounting standard referred to in sub-section (3c) of
Section 211 of the Act;
e. On the basis of written representations received from the directors, as
on 31st March, 2006, and taken on record by the Board of Directors, none of
die directors is disqualified as on 31st March, 2006 from being appointed
as a director in terms of clause (g) of sub-section(1) of Section 274 of
the Act;
f. In our opinion and to the best of our information and according to the
explanation given to us, the said financial statement together with the
notes thereon/attached there to and the Schedule of significant accounting
Polices, subject to note I(b), I(c), II & 17, which is general in nature,
note no. 13 regarding installed capacity of rite company, note no 14
regarding non provision of obsolete stocks, for which no determined figure
has been provided, further secretarial records were audited by company
secretary in its report and no! by us, and also prior period excise records
were with excise officials, consequently, the present records were not to
complete audit scrutiny, give in the prescribed manner the information
required by the act and give a true and fair view iii conformity with the
accounting principles generally in India:
a) In the case of the Balance Sheet, of the state of affairs of the Company
as at 31st March, 2006;
b) In the case of the Profit and Loss Account, of the profit for the year
ended on that date; and
c) In the case of the Cash Flow Statement, of the cash flows for the year
ended on that date.
Ashwani Gupta, F.C.A. LLB
Membership no.: 80719
Prop.
PLACE: Jalandhar City ASHWANI GUPTA & ASSOCIATES
Dated: 28.7.2006 CHARTERED ACCOUNTANTS